In an
apparent attempt to gain a strategic advantage, Plaintiff
Mid-America Taping & Reeling, Inc.
(“Mid-America”) filed suit against Defendants SMT
Corporation (“SMT”), Kirsten Sharpe, Tom Sharpe
(collectively, the “SMT Defendants”),
[1] and
Robert Lingl[2] several weeks after reaching an agreement
in principle with SMT to settle SMT's claims against
Mid-America and a day before SMT threatened to take legal
action of its own. Mid-America claims that the SMT Defendants
and Lingl violated the Defend Trade Secrets Act, 18 U.S.C.
§ 1831 et seq., that Lingl breached a
non-disclosure agreement and his fiduciary duties to
Mid-America, and that SMT, Kirsten, and Lingl tortiously
interfered with Mid-America's prospective economic
advantage. The SMT Defendants have moved to dismiss the
complaint or, alternatively, to transfer the case to the
District of Connecticut. Because the Court does not have
personal jurisdiction over the SMT Defendants, the Court
dismisses Mid-America's claims against them.

Mid-America,
a corporation owned by Barbara Pauls, manufactures,
assembles, and sells taping and reeling products such as
vacuum sealers, SMD covertape, SMD plastic reels, static
shielding and moisture barrier bags, humidity indicating
cards, and splicing supplies. It also provides services for
surface mounting taping, lead forming, memory device and
flash programming, baking and dry packing, and paper carrier
taping. Mid-America began its operations in Illinois and then
opened a facility in Florida as its business grew. According
to Mid-America, only seven other corporations provide similar
reeling and taping services, making the market extremely
competitive.

In
1991, Mid-America hired Lingl, Pauls' brother, to manage
its Illinois facility. Lingl worked for Mid-America for
approximately eight years before leaving to work for SMT, a
Connecticut corporation.[4] He worked at SMT until he returned to
Mid-America in November 2015. Corresponding roughly to the
same time Lingl worked at SMT, Mid-America saw a decrease in
its revenue. According to Mid-America, after Lingl returned
to work for it in November 2015, Mid-America learned that
Lingl had provided SMT with Mid-America's hardware and
customer lists, which allowed SMT to pursue Mid-America's
customers.

II.
The SMT Defendants' Version of the Facts

The SMT
Defendants present a different story. According to them,
Lingl left Mid-America in 1999 to work for SND Electronics, a
company unrelated to SMT, where he managed SND
Electronics' tape and reel business for eight years. SND
Electronics then sold its tape and reel business to an SMT
affiliate in 2007, with Lingl becoming an employee of
SMT's affiliate and ultimately SMT.[5] Pauls knew of
Lingl's employment with SMT, frequently speaking with
Lingl while he worked there. The SMT Defendants later learned
that Pauls had Lingl ship her over 100 packages from
SMT's tape and reel department without invoicing and
openly discussed having Lingl resign from SMT and take
SMT's tape and reel customer base to Mid-America. In
early October 2015, Lingl put this plan into motion when he
advised the Sharpes that he was resigning from SMT due to a
serious medical condition and moving to Illinois for
treatment. Lingl indicated that he had trained his daughter,
Bethany, in all aspects of SMT's tape and reel business
so that she could manage the department on her own when he
left. On Lingl's recommendation, SMT promoted Bethany to
head the department. But instead of leaving SMT to address
health issues, Lingl took a position managing
Mid-America's facility in Coconut Creek, Florida, living
in a condominium that Pauls had purchased for him.

In late
2015, the SMT Defendants learned of issues with Bethany's
management of SMT's tape and reel department. This led
them to review the department's records, including
Bethany's emails. In doing so, they found evidence that
Lingl sent packages from SMT without invoices, directed SMT
customers to Mid-America or other competitors even though SMT
could have handled the business, and misappropriated
SMT's records and used those records after resigning to
solicit customers for Mid-America. The SMT Defendants also
found that Lingl directed Bethany to ship SMT products to him
at Mid-America's Florida facility without charge and then
sold these products to Mid-America customers. Based on these
discoveries, SMT terminated Bethany on February 23, 2016, and
both Bethany and Lingl were arrested in July 2016 and charged
with larceny. A number of SMT-owned customer log books were
seized from Lingl's residence and Mid-America's
facility in Florida.

On
September 14, 2016, SMT's counsel sent a demand letter to
Pauls as Mid-America's president and CEO, identifying
claims it intended to assert against her and Mid-America
arising out of the scheme to defraud SMT and take its
property. Mid-America's counsel proposed a meeting in
Connecticut to discuss resolution of the claims, which
occurred on November 2, 2016. The parties reached an
agreement in principle to settle the claims identified in
SMT's demand letter, but Mid-America and Pauls thereafter
failed to respond to SMT's counsel's attempts to
memorialize the agreement. SMT's counsel indicated it
would take action if it did not hear from Mid-America or
Pauls by November 18, 2016. On November 17, 2016, Mid-America
filed this case against the SMT Defendants and Lingl.

III.
Additional Jurisdictional Facts

The
Sharpes founded SMT in 1999. Kirsten holds all of SMT's
outstanding shares and serves as President and Treasurer,
while Thomas serves as SMT's Vice President. Together,
they manage SMT's day-to-day operations. The Sharpes do
not own any property in Illinois or personally conduct any
business in Illinois.

SMT's
sole facility is in Newtown, Connecticut, with all of its
employees working from that facility. SMT is not registered
to do business in Illinois and does not manufacture or
assemble products in Illinois. It has occasionally purchased
inventory from Illinois suppliers or vendors, including
Mid-America. In 2015, SMT purchased $7, 541.05 of products
from Mid-America. That number dropped to $3, 781.07 in 2016.
SMT's total purchases from Illinois vendors, excluding
Mid-America, totaled $24, 002.57 in 2015 and $30, 967.62 in
2016, which represented less than 1% of its total purchases
each year. Only SMT's purchases from Mid-America related
to the tape and reel business. As for sales, between 2012 and
2015, SMT made less than 1% of its sales to Illinois
customers, while in 2016 approximately 3.4% went to Illinois,
with the vast majority of the Illinois sales composed of
components and testing services to one customer. According to
the SMT Defendants, SMT has not sold tape and reel products
or services to Illinois customers. SMT also does not directly
market or advertise in Illinois or target potential customers
in Illinois, although it does maintain a website accessible
from Illinois.

&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;&nbsp;LEGAL
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